April 5 2024
Awash in gas
FLASH No Labels abandons 3rd party presidential bid
1 Federal Reserve Chair foresees interest rate cuts this year
2 Falling US natural gas prices boost the economy
3 Housing costs outpace typical income by almost $30k
4 Eggheads simulate national debt, conclude it’s too high
5 Earth inundated by plastic pollution
4/5/1933 FDR creates Civilian Conservation Corps
see ad astra on x @greg_loving
1 Federal Reserve Chair foresees interest rate cuts this year
Stronger-than-anticipated economic activity this year hasn’t changed the Federal Reserve’s broad expectation that declining inflation will allow for interest-rate cuts this year, Chair Jerome Powell said Wednesday.
Some analysts have pointed to strong growth and brisk hiring over the past year as evidence that monetary policy isn’t restrictive, but Powell said he didn’t agree with those views during a question-and-answer session that followed his speech. He said healing supply chains—as well as an influx of workers to the job market last year, including from increased immigration—could explain why the economy expanded at a much faster rate than economists anticipated given how the Fed has lifted and held interest rates at a 23-year high.
2 Falling US natural gas prices boost the economy
Natural gas prices at the Waha Hub in West Texas have been below zero for going on two weeks — that’s outright negative cash prices…which means Permian producers are literally paying to have their gas taken away
The dramatic collapse of US natural gas prices this year is quietly helping to boost the nation’s economy, slashing some energy costs even as the prices of other necessities continue to rise. While natural gas doesn’t grab attention quite like crude oil, it’s a behind-the-scenes fuel that permeates the economy, used to heat homes, generate electricity, run factories and make fertilizer. When gas futures surged in 2021-2022, the ripple effects hit consumers and manufacturers alike. Now that prices have plummeted to the lowest in four years, the relief is becoming apparent. The drop in gas underscores the waning impact that energy is having on the wider cost of living in the US. In June 2022, the sector was contributing to about one-quarter of overall inflation, and now that’s dropped to essentially zero, CPI data show.
While the clearest benefit from the price drop has so far come in utility bills, the decline is poised to start filtering through to other sectors of the economy.
Many manufacturing plants are powered by natural gas. If they can lower their energy costs, that’s a huge competitive advantage, said Carl Neill, a senior energy analyst at StoneX Group.
3 Housing costs outpace typical income by almost $30k
Housing costs are outpacing median household incomes in the U.S., further straining affordability. Would-be homebuyers need to earn $113,520 a year to afford the typical house in the U.S. That is 35% more than what the typical household earns annually, which is $84,072, according to a new analysis by Redfin, a national real estate brokerage site. “Since the pandemic, affordability has just totally collapsed,” said Chen Zhao, a senior economist at Redfin. February 2021 was the last month when the typical household earned more money than it needed to afford the median home. There’s been a deficit ever since, Zhao said.
4 Eggheads simulate national debt, conclude it’s too high
The Congressional Budget Office warned in its latest projections that US federal government debt is on a path from 97% of GDP last year to 116% by 2034 — higher even than in World War II. The actual outlook is likely worse. From tax revenue to defense spending and interest rates, the CBO forecasts released earlier this year are underpinned by rosy assumptions. Plug in the market’s current view on interest rates, and the debt-to-GDP ratio rises to 123% in 2034. Then assume — as most in Washington do — that ex-President Donald Trump’s tax cuts mainly stay in place, and the burden gets even higher. With uncertainty about so many of the variables, Bloomberg Economics has run a million simulations to assess the fragility of the debt outlook. In 88% of the simulations, the results show the debt-to-GDP ratio is on an unsustainable path — defined as an increase over the next decade.
5 Earth inundated by plastic pollution
Our world is increasingly plastic. Back in the 1950s, humanity produced just 5 million metric tons of plastic per year; today it’s 400 million metric tons. Since plastic can take hundreds or thousands of years to biodegrade, pretty much all of it is still around, except for the roughly 20 percent that’s been burned. By some estimates, there are now eight gigatons of accumulated plastic on Earth — twice as much as the weight of all animal life. Much of this plastic is still in use, in products like cars and homes, but a lot is junk; 40 percent of plastic production goes toward packaging that’s typically tossed after being used once. Some of our plastic waste is recycled, responsibly incinerated or properly landfilled, but tens of millions of tons are mismanaged annually — burned in open pits or left to pollute the environment. Plastic pollution has been found at the poles and the bottom of the ocean, in our clouds and soils, in human blood and mothers’ milk. If things keep going as they are, it is predicted that annual rates of plastic flowing into the sea will triple from 2016 to 2040.
4/5/1933 FDR creates Civilian Conservation Corps
President Franklin D. Roosevelt establishes the Civilian Conservation Corps (CCC), an innovative federally funded organization that put tens of thousands of Americans to work during the Great Depression on projects with environmental benefits. The CCC, also known as “Roosevelt’s Tree Army,” was open to unemployed, unmarried U.S. male citizens between the ages of 18 and 26. All recruits had to be healthy and were expected to perform hard physical labor. Enlistment in the program was for a minimum of 6 months; many re-enlisted after their first term. Participants were paid $30 a month and often given supplemental basic and vocational education while they served. Under the guidance of the Departments of the Interior and Agriculture, CCC employees fought forest fires, planted trees, cleared and maintained access roads, re-seeded grazing lands and implemented soil-erosion controls. They built wildlife refuges, fish-rearing facilities, water storage basins and animal shelters. To encourage citizens to get out and enjoy America’s natural resources, FDR authorized the CCC to build bridges and campground facilities. From 1933 to 1942, the CCC employed over 3 million men. Of Roosevelt’s many New Deal policies, the CCC is considered by many to be one of the most enduring and successful. It provided the model for future state and federal conservation programs. In 1942, Congress discontinued appropriations for the CCC, diverting the desperately needed funds to the effort to win World War II.
Thanks for reading!
